FAC Explorer

Finding 30023 (2022-001)

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Requirement
C
Questioned Costs
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Year
2022
Accepted
2022-11-01
Audit: 38061
Organization: Child INC (TX)
Auditor: Abip PC

AI Summary

  • Core Issue: Child Inc. drew down $511,690 in federal funds without incurring allowable expenses during the fiscal year.
  • Impacted Requirements: The organization failed to comply with federal guidelines that require minimizing the time between fund transfers and disbursements for allowable expenses.
  • Recommended Follow-Up: Implement procedures to ensure allowable expenses are identified before or at the time of federal fund drawdowns.

Finding Text

Finding 2022-001: Head Start/Early Head Start Cluster ALN #93.600 Condition/Cause: Child Inc. had $511,690 at April 30, 2022 of Head Start/Early Head Start funds that were drawndown from the federal government but allowable expenses had not been incurred during the fiscal year. Criteria: Child Inc. should have procedures that ensure that the time lapse between the transfer of funds from the federal government and the disbursement of those funds are minimized. Context: The $511,690 in federal drawdowns were not associated with allowable expenses incurred during the fiscal year. These funds are recorded as unearned revenue at April 30, 2022. Effect: Child Inc. was not in compliance with federal requirements to minimize the time between transfers of federal funds and disbursements of those funds for allowable expenses. Recommendation: Child Inc. should implement procedures to ensure that the Organization has allowable expenses prior to or at the time of the drawdown for federal programs.

Corrective Action Plan

View of Responsible Officials and Corrective Actions: William Penny, the CFO and Albert Black, the Executive Director will approve drawdowns based on periodic reports of allowable expenses so that funds drawn down match expenses for the period. Also, the CFO and the Executive Director will review year-to-date PMS payment requests and disbursements under each grant on a continuous basis to ensure our revenue matches expenses. Responsible person: William Penny, CFO Implementation date: October 3, 2022

Categories

Cash Management

Other Findings in this Audit

Programs in Audit

ALN Program Name Expenditures
10.558 Child and Adult Care Food Program $544,193
14.218 Community Development Block Grants/entitlement Grants $57,288
93.600 Head Start $1,227